16 Rev2b NGA Opinion Supplementary doc - IRG

ERG (07) 16rev2b NGA Opinion Supplementary Doc 13 / 69
Question Chapter 4: What is your opinion on the regulatory implications
and on the evolution of the ladder of investment?
Differences in Competitive Condition and Implications for Regulation
Consultation Comments
Several comments claimed that different geographic markets exhibit different competitive
conditions. These differences should be taken account of when applying remedies. This position
was taken by several incumbent as well as some other stakeholders (Alcatel-Lucent,
Corning Cable Systems, ETNO, ETP, FT, KPN, TI, Telefónica). Thereby they explicitly or
implicitly called for a departure from the notion of national markets. ERG is criticized not to
draw the right conclusions from recognizing differences among Member States. The right
approach would be to refrain from regulation where platform competition exists.
Some of these comments make a distinction between market-driven (densely populated areas,
where competition is considered well functioning), policy-driven (rural areas, where
there is no case for facilities based competition) and risk-driven (or grey areas, sub-urban
regions). Similarly, one incumbent (KPN), referring to the situation in its home market, distinguished
between areas with major offices and/or apartment blocks where infrastructure competition
could take place and areas with individual houses where the first NGA investor may
gain an effective local monopoly. This comment raises the question of how to regulate the
various local monopolies. Also, it sees a danger that NRAs might focus regulation on the
fixed incumbent who then did not invest.
Some other comments stressed that different situations in different Member states would
require a specific analysis and specific remedies (BREKO, BSG, WIND). One of these comments
also mentioned possible differences within Member States. These comments have in
common that they do not infer a call for deregulation from the differences observed.
A cable stakeholder favoured such a geographical segmentation (Corning).
ERG Considerations
The economics of NGA networks are likely to vary across different technologies and different
geographies, as shown in Chapter 3. Conditions are likely to differ greatly among Member
States and within different regions of Member States and may lead to significantly different
competitive conditions possibly justifying the definition of sub-national markets (unless there
is e.g. a common price constraint) in certain cases. Where a national market is defined, regulators
may think of differentiating remedies within the national market.
Transparency
Consultation Comments
Many comments stress the importance of transparency on the NGA deployment plans of
incumbent (Arcor, BREKO, ECTA, ISPA, Oni Telecom, Platform Telecom Operators &
Service Providers, Sonaecom, Tele2, WIND). One incumbent (BT) even considers the
need for transparent plans and open consultation by incumbents with competitors a key element
omitted in the consultation document. Another comment refers that“quasi nonexistence”
of such transparency is causing uncertainty and ultimately deterring investment by
competitors. It is required to set clear lead-times on changes in dominant operator’s wholesale
portfolio to balance the interests of incumbents and competitors.